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This document sets out the UK Government's suggestions for improving the system for recognising professional qualifications across the European Union (EU). Recent evidence suggests that there is significant untapped potential in EU services, both in terms of productivity and employment. Reforms that improved the single market in services could have a significant impact on growth within the EU. Reforming the process for mutual recognition of professional qualifications in the EU is a key achievable priority in improving the single market in services, and creating growth.

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There is an apparent inconsistency in the existing literature on graduate employment in the UK. While analyses of rates of return to graduates or graduate markups show high returns, suggesting that demand has kept up with a rapidly rising supply of graduates, the literature on over-education suggests that many graduates are unable to find employment in graduate jobs and the proportion over-educated has risen over time. Using a simple supply and demand model applied to UK data that defines graduate jobs in terms of the proportion of graduates and/or the graduate earnings markup within occupations, we find that the employment of graduates in non-graduate jobs has declined over time. Hence, there is no evidence of an over-production of graduates in the UK.

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This publication presents experimental outcome based measures covering the destinations (into employment and learning) and progression of post-19 learners completing funded further education training in 2010 to 2011. The measures make use of administrative datasets already held by government to observe learning and employment activity in 2011 to 2012, and prior attainment of learners to measure progression.

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Dual apprenticeship training is a market-driven form of education at the upper secondary level, taking place in firms as well as in vocational schools. So far, little is known about the impact of the business cycle on the number of apprenticeship programs offered by firms. Using panel-data of Swiss cantons from 1988-2004, we find that the influence of the business cycle is statistically significant, but small in size. Instead, supply of apprenticeship programs is driven to a much greater extent by demographic change. Conversely, the number of first-year high school students is not affected by the business cycle. We find, however, that enrollment increases if the population at age 16 grows, but access to high schools does not become more restricted in times of negative growth.

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This study attempts to explain why the transition to a market economy is skill-biased. It shows unequivocal evidence on increased skill wage premium and supply of skills in transition economies. It examines whether similar skill-favouring shifts in the Russian and US economies are driven by the same set of factors. [The] analysis elaborates on the model of alternative theories of the increased wage skill premium and then evaluates three main hypotheses: skill-biased technological change, the market adjustment hypothesis, and the institutional factor hypothesis. To test these hypotheses, the study uses unique linked employer-employee data that spans the 16 years of the Soviet and transition periods in Russia (1985-2000), with a special emphasis on data quality, measurement errors, and retrospective biases. The main conclusion is that there is no uni-causal and time-invariant explanation for skill-biased changes in wages and employment in the Russian economy. The increased skill wage premium has been driven mainly by institutional factors during the early period and by productivity and technological change during the late transition period, and reinforced by market adjustment of wage ratio to the true differences in labour productivity.

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[This paper] reports research findings on the [UK] government's proposal for adults aged 24 and above, who study for qualifications at level 3 and above, to make greater contributions to the costs of their learning. The government proposes to remove grant funding for these further education learners and courses. This will allow the government to focus investment on younger and lower-qualified learners who are less likely to invest in themselves. Instead, the government will provide income-contingent loans to cover the resulting upfront costs, in line with its principles of promoting fairness and personal responsibility. These 24+ Advanced Learning Loans will be made available to new learners from the 2013 to 2014 academic year, with the first full year expected to be the 2014/15 academic year. [Department for Business, Innovation and Skills] BIS carried out an impact assessment to show the economic costs and benefits of this proposal, and an equality impact assessment to look at how the proposal will affect different types of learners. This research provides a greater understanding of four specific learner groups: those aged 40+, and particularly those out of work; those with mental or physical disabilities or learning difficulties that have particular needs regarding communication and information; those seeking to take up Advanced/Higher Apprentices; and Muslim learners. This research indicated that most learner groups are unlikely to be put off by the loans proposition, provided it is communicated effectively. It also highlighted groups which are likely to face specific issues and challenges.

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This report presents the findings of a survey designed to provide new evidence about self-employed people. The number of self-employed people in the UK increased by over half a million between 2010 and 2015, accounting for over a quarter of the growth in total employment over that period. Previous research has shown that self-employed people are a diverse group, so there are likely to be many reasons for their choice of being self-employed. This survey aims to develop understanding of these reasons and the wider impact of this growth in self-employment. The survey covers: why and how people choose to enter and remain in self-employment; how they view their situation; the difficulties they faced; and how they manage their life in self-employment.

Key findings include: self-employment is a positive choice for the majority but for some it is less of a proactive choice and can be precarious; most plan to stay in self-employment; most self-employed people have no ambition to be employers; the self-employed feel their lives are better overall and over half think they are better off financially; most self-employed people have additional sources of income; some do experience big problems but they are not universal; the areas where more people report big problems tend to relate to planning; there does not appear to be a problem with support to set up in self-employment; working or cooperating with other self-employed people and businesses is common; and more money or security were the main attraction for those who had left self-employment and become employees.

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We examine the dynamic role of education and experience as determinants of wages. It is hypothesised that an employee’s education is an important signal to the employer initially. Over time, the returns to schooling should decrease with labour market experience and increase with initially unobserved ability, since the employer gradually obtains better information on the productivity of an employee. Replicating US studies using data from a large German panel data set (GSOEP), we find no evidence for the employer learning hypothesis for Germany. Differentiating blue-collar and white-collar workers and estimating quantile regressions, however, leads to the conclusion that employer learning takes place for blue-collar workers at the lower end of the wage distribution. We further show, that information on the productivity of an employee is to a large extend private.

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Equality impact assessments are an important framework for demonstrating due regard through considering evidence and analysis to help identify the likely positive and negative impacts that policy proposals may have on certain protected groups of consumers and to estimate whether such impacts disproportionately affect such groups. This assessment takes a summary view of the equality impacts of the changes to the apprenticeship program outlined below: (1) new incentive payments for small employers to take on a young apprentice for the first time; (2) measures to make it quicker and easier for employers to take on an apprentice, including reducing the time it takes an employer to advertise for an apprentice to one month, and stripping back any unnecessary health and safety requirements; (3) requiring apprenticeship providers to offer training in English and Maths up to the standard of a good [General Certificate of Secondary Education] GCSE to all apprentices, and publishing their progress; (4) launching a new employer-led review into the standards and quality of apprenticeships, to ensure every apprenticeship delivers professionally recognised qualifications which employers value; and (5) prioritising the efforts of the National Apprenticeship Service where apprenticeships deliver greatest value, including on younger adults, new employees, higher level qualifications and particular sectors, whilst maintaining a demand-led, all age program open to all sectors across the economy where high quality apprenticeships can be offered.

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Any serious empirical study of factor substitutability has to allow the data to display complementarity as well as substitutability. The standard approach reflecting this idea is a translog specification - this is also the approach used by numerous studies analysing the relative capital-skill complementarity hypothesis formulated by Griliches (1969). According to this hypothesis, the degree of substitutability between skilled labour and capital is lower than that for unskilled labour and capital. Yet, the results of empirical studies investigating this hypothesis are controversial. This paper offers a straightforward explanation: using a translog approach reduces the issue of factor substitutability or complementarity to a question of cost shares. Our review of translog studies mentioned in Hamermesh’s (1993) summary on the demand for heterogeneous labour demonstrates that this argument is empirically relevant - all these studies can be reconciled with each other on the basis of the cost-share argument.

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